The DBS Absolute Return Fund is the first of this asset class to be launched by the bank for the Singapore retail market and, DBS says, it will be followed by a series of alternative investment solutions for investors.
The fund will be managed by DBS Asset Management and will be offered to both retail and institutional investors in Singapore. The minimum subscription is either S$5000 for the capital guaranteed version or $S20,000 for the non-guaranteed option. The guaranteed version has a tenure of seven years.
US-based Ivy Asset Management will act as the fund's advisor. The fund will invest in 20 underlying managers, mainly long short equity managers but also special situations and relative value managers.
"For the DBS Absolute Return Fund, DBASM has excluded volatile strategies like global macro, commonly associated with volatile hedge funds, managed currencies and short selling to build a customised product that has a high quality return profile with low volatility," says Joseph Tern, executive director of DBASM.
Jeffrey Lindenbaum, managing director of products and markets at Ivy Asset Management, believes the Asian market is ripe for this product category. "We believe Asian investors will welcome the chance to garner the benefits of investing in alternative investment funds," he says.
The launch of the Singapore fund comes right on the heels of the launch of a similar product in Hong Kong by HSBC. The latter does not include a guaranteed version, but both are the first in their respective markets to take advantage of recent regulations allowing the launch of retail hedge funds and launch fund of hedge funds. Neither bank has given any indication of the target size of their funds. The DBS funds launch period ends on March 14, while HSBC's ends on February 26.
